New electric bill format to reflect VAT-exempt system loss charges

MANILA, Philippines — The Energy Regulatory Commission (ERC) has adopted a new format for consumers’ monthly electricity bills to reflect the allowable system loss charges that were earlier declared exempt from value-added tax (VAT).

In a press release on Tuesday, September 28, the state’s electric power agency said distribution utilities are required to “clearly and separately” break down all the government-mandated pass-through charges in the new bill format.

The new bill format was approved by the ERC through Resolution No. 28, series of 2026, during a commission meeting held on September 16.

In the new bill format, the allowable system loss charges are separately identified and excluded from gross sales for VAT computation.

“The new format will make it easier for consumers to distinguish between charges subject to VAT and government-mandated pass-through charges excluded from VAT,” the ERC said in a statement.

The adoption of the new billing format comes after the Bureau of Internal Revenue (BIR) formally removed the 12% VAT on allowable system loss charges in September as part of the government’s efforts to cut the electricity bills paid by consumers.

Standardized ‘other charges’

Aside from the new bill format, the ERC has also passed Resolution No. 30, series of 2026, to adopt uniform rates on “other charges” that distribution utilities may collect from their consumers.

“The new framework aims to make these charges more transparent, consistent with the applicable regulatory principles, and directly tied to the actual cost of providing specific services,” the ERC said.

Under the new policy, distribution utilities may impose and collect the “other charges” only on specific customer-requested and account-related services, such as connection, disconnection, and reconnection services.

It also formalized the computation for “other charges,” including only the direct labor, deployment and fuel, and replacement materials that were directly used for providing service. Other administrative-related costs, meanwhile, are excluded from the computation.

“For consumers, this means greater protection against double charging. Costs already recovered through ERC-approved Distribution, Supply, and Metering rates cannot be collected again from the Other Charges,” the agency added.

Late payment rules

Late payments were also covered in the ERC’s resolution, saying that they must also be identified as a separate item by the distribution utilities in the new bill format.

According to the agency, distribution utilities may only charge their consumers 2% of either the current month’s bill or the unpaid portion, depending on which is lower, for the late payment fee.

The distribution utilities were also reminded to properly issue a Notice of Disconnection to consumers in case of nonpayment.

The distribution utilities are given 90 days to adjust their billing and other systems.

“They must also make the uniform schedule of charges accessible through their bulletin boards, official websites, and other official social media platforms,” the ERC said.